The European Commission has issued a formal warning that it will initiate legal proceedings against Germany for failing to comply with a European Court of Justice ruling on the Volkswagen law.
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Germany has eight weeks to revise the law or the Commission may seek that the nation is fined.
The German cabinet approved the new law at the end of May. The law was redrafted after the European Court of Justice ruled that the existing law, which dated back to the privatization of Volkswagen in the 1960s, breached European laws on the free movement of capital. The new law retains a power of veto for the state of Lower Saxony on all major decisions.
Porsche welcomed the European Commissions’ response. It has been arguing for the right of veto to be removed and has said for some time that it has support for its position in Brussels.
VW works council chief Bernd Osterloh demanded that the Commission listen to employees concerns that Porsche is trying to remove historic workers rights. The power of veto was put in place in the 1960s to protect employment in the region. Workers are concerned that Porsche might shift production to lower cost locations and cut jobs in Germany.
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By GlobalDataPresident of Lower Saxony, Christian Wulff, said the action by the EU was ‘regrettable’.
